From a historical perspective over the past 17-18 years the cost has come down by a factor of 15x. In the next 5-10 years we should be able to come down by an incremental 2-4x and we will have to do that to accelerate the penetration of the technology.

If I am doing the math correctly, 15x over 17 years is a decrease of 14% each year. Keeping at that rate would put the prices as around 1/2 in 5 years and 1/4 in 10 years. I hope he is right, as the key factor in EV adoption is battery prices.

CPI believes four factors need to be taken into account to make a valid comparison:

First, CE pricing is based on the beginning-of-life capacity whereas AT pricing is based upon end-of-life capacity and even for a highly durable chemistry the ratio of end-of-life to beginning-of-life is 75%.

Second, the AT application is sized for a 70% depth of discharge, the gap between minimum and maximum charge levels, which allows space on the high end for regenerative braking and space on the low end to provide enough power for charge sustaining operation.

Third, the AT market has more stringent requirements on the validation of the individual cells.

Fourth, a vehicle pack battery pack has non-cell costs such as a monitoring system.

All four of these items together justify a 2.5x premium for the AT application (or approximately $1,000/available kWh) compared to the $350/stated kWh of a CE system, CPI says.

Interesting, I was unaware of the difference. This seems to imply that a new EV battery will actually have a 25% greater capacity than what is stated. I wonder if you can take advantage of that for a longer range?

I am curious if EV buyers wouldn't mind trading a shorter life span for a cheaper price. If a battery only lasts 8 years, but is 70% of the price, this might be a good trade off. Especially considering that if he is right about the price decreases, in 8 years a replacement battery would only cost 33% of the current price.

When purchasing a PHEV or EV the consumer is spending a significant amount of money on a battery that, if properly implemented, will depreciate more slowly than the rest of the vehicle. After 10 years of operation the battery will still have 75% of its energy storage potential and could be used for non-automotive applications like load leveling for the grid to accommodate renewable energy. Properly capturing this residual value can have a significant impact on the financial viability of an electric vehicle.

If you get a consortium of companies (i.e. power providers) to buy the battery and lease them to the customer we can make the lease payment very attractive in the end. Because what we call end of life is maybe a 25% loss of power or energy but it is still 3x more than what you get from lead acid ... but the consumer cannot realize this value on their own ... they need help.

I wonder what how much you could sell these batteries for after 10 years? Can you recoup 50% of the original price? Finding a way to capture this value will reduce the upfront cost. I also wonder how long these 10 year old batteries will be good for? Does the the energy storage potential decreases rapidly at this point or is it fairly stable for a long time?

On hybrids and gasoline prices:

In general, the price of gasoline needs to be above US$3.50/gallon for traditional hybrids to be financially attractive, assuming a $3,500/vehicle premium of which a third is spent on the battery pack, CPI says.

On the best size for batteries to start the adoption of electric vehicle:

One of the issues with the acceptance of pure EVs is if you want to provide a 100-mile range...you end up putting so much battery in that it ends up being used only 10% of the time or less and yet you are saddling the customer with that cost ...we need to find a better way so when they go on the occasional long trip or need that range...they can get something or rent something. With that being said, there are practical issues we need to deal with, for example even something as simple as being able to drop the battery pack out and put a new one in is a challenge because these high power connectors aren’t designed to be disconnected and reconnected on a regular basis.

That is why to me the plug in or range extended hybrid is a good stepping stone because it tries to balance the value equation with providing the amount of battery that would be used 80% of the time but addressing this range issue and the emotional issue of running out of battery with a relatively small and inexpensive engine and generator. People will start to feel comfortable and realize forty miles isn’t that bad ... and re-evaluate their expectations for range.

Interesting. He believes you should size the battery so that it maximizes its usage, rather than making it larger and minimizing the need to use other fuels.

3 comments:

i don't know if this means there's a 25% greater capacity in the batteries or if they're accounting for that already, but either way, the lifecycle effects of a drain to zero versus a drain to 20% are pretty huge... i.e., you can run your battery to zero every time, but it'll really cut short the life of the battery. (i believe battery damage is usually related to the square of the amount it is drained)

Thanks for the double check AE. I always get screwed up because if you have a 33% increase then need a 25% decrease to get back to the same place.

Anon,

Interesting. I still don't understand if the batteries decrease by 25% over 10 years, does that mean a 25% lower range? If not, then what happens?

I had though that with a lithium ion, that it didn't matter how much you discharged before recharging. But what you are saying is that a 100 kWh battery should only use 80 kWh of its charge, so the range is 20% less than what you might think just by divining capacity by kw/mile.